System for funding third-party-administered losses
A computerized system for funding third-party-administered insurance claims includes at least one processor configured to provide a claim data throughput module for receiving at least one claim transaction from at least one third party administrator, an administrative services module for receiving at least one bank transaction from at least one third party administration, for passing at least one bank transaction to a bank, and for receiving at least one paid file from a bank, and a transactions matching engine for validating at least one bank transaction based upon at least one claim transaction, and for determining completion of at least one bank transaction based upon at least one paid file.
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The present invention relates to insurance claims processing and, more particularly, to reconciliation and funding of third-party-administered claim transactions.
BACKGROUND OF THE INVENTIONInsurance is a business of protecting and helping after the occurrence of an accident, loss or tragedy. In the event of an accident or loss, a policyholder or a third-party claimant can obtain payments or benefits, as provided in an insurance policy, by filing an insurance claim with the issuing insurance company. Many insurance companies employ certain third parties or TPAs to handle insurance claims, including tasks such as verifying the amount of the claim to be paid and ensuring that the claim is timely paid.
TPAs provide skill and cost efficiencies for insurance companies, but can introduce delays in claim resolution and unwanted complexity in claim reconciliation. In particular, problems can arise in transferring funds from an insurance company to a policyholder through a TPA-administered escrow account. The most common problems relate to timing issues, where insurance company money is advanced to a non-insurer-owned escrow account and then remains in the account. Representative problems include undue exposures to bank capitalization risks and to risks of garnishment or seizure related to TPA financial exposures, and also include opportunity costs imposed on the insurer by reduced cash liquidity. Additionally, TPA ownership of escrow accounts complicates insurer participation in a “positive pay” type process for disbursing funds to claimants. However, insurer ownership of escrow accounts comes with its own problems, including challenges of real-time transaction and balance tracking and reconciliation. Accordingly, it is desirable to have a system for handling third-party-administered insurance claims, wherein insurance company money can be held in an insurer-owned account and can move promptly to policyholders on resolution of a claim.
SUMMARY OF THE INVENTIONAccording to an embodiment of the present invention, a computerized system for funding third-party-administered insurance claims includes at least one processor configured to provide a claim data throughput module for receiving at least one claim transaction from at least one third party administrator, an administrative services module for receiving at least one bank transaction from at least one third party administration, for passing at least one bank transaction to a bank, and for receiving at least one paid file from a bank, and a transactions matching engine for validating at least one bank transaction based upon at least one claim transaction, and for determining completion of at least one bank transaction based upon at least one paid file.
According to another embodiment of the present invention, a computer-readable medium is encoded with instructions for configuring at least one processor as a claim data throughput module for receiving at least one claim transaction from at least one third party administrator, as an administrative services module for receiving at least one bank transaction from at least one third party administration, for passing at least one bank transaction to a bank, and for receiving at least one paid file from a bank, and as a transactions matching engine for validating at least one bank transaction based upon at least one claim transaction, and for determining completion of at least one bank transaction based upon at least one paid file.
According to a further embodiment of the present invention, a computer-implemented method for funding third-party-administered claim transactions includes receiving at least one claim transaction from at least one third party administrator at a processor configured to implement a claims data throughput module; generating at least one claim transaction based on at least one claim transaction via a processor configured to implement a bank lookup process; receiving at least one bank transaction from at least one third party administrator at a processor configured to implement an administrative services module; validating at least one bank transaction with at least one claim transaction via a processor configured to implement a transactions matching engine; receiving at least one paid file from at least one bank at a processor configured to implement an administrative services module; and verifying completion of at least one validated bank transaction in a processor configured to implement a transactions matching engine, based on at least one paid file.
These and other objects, features and advantages of the present invention will become apparent in light of the detailed description of the best mode embodiment thereof, as illustrated in the accompanying drawings.
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The master file update protocol 60 incorporates the accepted claim transactions 58 into a master audit file 64 also including internally-generated claim transactions 65, and passes the master audit file 64 to a financial sync process 66. The master file update protocol 60 also sends the master audit file 64 to the Sub Ledger 44. The balance reconciliation engine 48 periodically pulls claim balances 67 from each of the TPAs 16, and uses the master audit file 64 and the transaction level details fed from the basic loss control module 52 to reconcile the claim transactions 14 against the claim balances 67.
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The computerized system 10 may be implemented in many different ways. For example, the computerized system 10 may be implemented in a central server architecture 100 that is centered on a conventional network host computer 102, as shown in
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For example, the communication port 108 may include wire modems, wireless radio, infrared, visible laser, or UV laser transceivers, or audio transceivers. The communication port 108 and the one or more data storage structures 110 are in communication with the processor 106 to facilitate the operation of the network host computer 102. The data storage structures 110 may comprise an appropriate combination of magnetic, optical and/or semiconductor or flash memory, and may include, for example, RAM, ROM, an optical disc such as a compact disc and/or a hard disk or drive. The processor 106 and the data storage structures 110 each may be, for example, located entirely within a single computer or other computing device; or connected to each other by a communication medium, such as a USB port, serial port cable, a coaxial cable, an Ethernet type cable, a telephone line, a radio frequency transceiver or other similar wireless or wireline medium.
At least one of the data storage structures 110 is encoded with (i) a program and/or algorithm(s) 116 (e.g., computer program code and/or a computer program product) adapted to configure one or more of the processors 106 to emulate the various modules of the computerized system 10, as described in detail hereinafter; and/or (ii) at least one database 118 configured to store information required, manipulated, or produced by the computerized system 10 in execution of the program 116, such as, for example, the claims detail file 22, the Sub Ledger 44, or the transactions matching engine 50.
The computer program 116 for configuring the processor 106 to implement the computerized system 10 (and other functions described herein) can be developed by a person of ordinary skill in the art, and is not described in detail herein. Suitable computer program code may also be provided for performing numerous other functions such as generating notifications at selected time intervals. For example, in addition to instructions for configuring the processor 106 to implement the computerized system 10, the program 116 also may include program elements such as an operating system, a database management system and “device drivers” that allow the processor to interface with computer peripheral devices (e.g., a video display, a keyboard, a computer mouse). The processor 106 may read the instructions of the program 116 from the data storage structures 110. The program 116 may be stored, for example, in a compressed, an uncompiled and/or an encrypted format, and may include computer program code. While execution of sequences of instructions in the program 116 will configure the processor 106 to emulate one or more of the modules of the computerized system 10, hard-wired circuitry may be used in place of, or in combination with, software instructions for implementation of the computerized system 10. Thus, embodiments of the present invention are not limited to any specific combination of hardware and software.
Each user device or computer or client terminal 112 may include any one or a combination of a keyboard, a computer display, a touch screen, LCD, voice recognition software, an optical or magnetic read head, or other input/output devices required to implement the above functionality. Each display unit 114 may include any one or a combination of a computer display, a printer, a CD/DVD burner, a magnetic tape drive, a magnetic disk drive, an LCD array, a voice speaker, a network connection, or similar output device. At least one of the user devices or computers or client terminals 112, or of the display units 114, may be configured according to the computer program 116, or according to other instructions, to provide various user interfaces for receiving data and for displaying messages including display of any of the various files 20, 22, 36, 42, 64, 68, or 76 and/or the alerts 80.
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In the central server architecture 100 shown in
One advantage of the present invention is that the interaction of the claim processing subsystem 12 and the administrative services module 18 with the TPAs 16 and the banks 24 enables insurer ownership of external accounts related to third-party-administered insurance policies. In particular, three-way matching of the bank transactions 26 to the transaction confirms 28 and to the status reports 40 enables insurer ownership of external accounts 25 without unacceptable financial exposures due to errors in transaction tracking. Another advantage of the present invention is that the interaction of the administrative services module 18, the Sub Ledger DTM 70, and the Sub Ledger 44 enables paid-check funding of external accounts related to third-party-administered insurance policies, as opposed to pre-funding the external accounts, thereby enhancing cash liquidity of an insurer without unacceptable financial exposure. Another advantage of the present invention is that the Sub Ledger 44 enables granular assessment of financial positions and exposures, both from a coverage- or policy-specific profitability perspective and from present and forecast cash flow perspectives.
Although the invention has been shown and described with respect to the detailed embodiments thereof, it will be understood by those skilled in the art that various changes in form and detail thereof may be made without departing from the spirit and the scope of the invention. For example, various formats and arrangements of the various files will be apparent to those skilled in the art. Similarly, it will be understood that the disclosed implementation of particular modules, processes, and protocols in particular servers, computers, or processors is only one of many possible embodiments of the invention, and that various modules, files, processes, or protocols may be combined or modified without departing from the teachings of the present disclosure.
Claims
1. A computerized system for an insurer to fund third-party-administered insurance claims comprising:
- at least one processor configured to: receive, from a third party administrator, an issue file comprising a plurality of bank transactions; wherein each of the plurality of bank transactions in the issue file is adapted to be executed by an insurer's bank to make a payment to a claimant from an insurer-owned bank account, each of the plurality of bank transactions including a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- compare the plurality of bank transactions in the issue file to a plurality of transaction confirms corresponding to a plurality of insurance claim transactions that have been accepted based on formal rules;
- wherein each of the plurality of transaction confirms includes a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- validate one or more of the plurality of bank transactions in the issue file if the transaction amount, transaction code, and bank information in a corresponding one of the plurality of transaction confirms match;
- pass the issue file received from the third party administrator to the insurer's bank so that the one or more of the plurality of bank transactions that have been validated are executed by the insurer's bank to make the payment to the claimant from the insurer-owned bank account;
- receive from the insurer's bank a paid file comprising a plurality of status reports corresponding to the plurality of bank transactions that have been validated;
- wherein each of the plurality of status reports includes a transaction amount, bank information, and a status code indicating the status of a corresponding one of the plurality of bank transactions;
- compare the plurality of bank transactions in the issue file to the plurality of status reports in the paid file received from the insurer's bank; and
- determine whether one or more of the plurality of bank transactions in the issue file is complete based on the status code in a corresponding one of the plurality of status reports in the paid file and whether the transaction amount and bank information in the corresponding one of the plurality of status reports in the paid file match.
2. The computerized system according to claim 1, wherein the at least one processor is further configured to update the transaction history to reflect completion of the one or more of the plurality of bank transactions that have been validated.
3. The computerized system according to claim 1, further comprising: at least one data storage structure configured to store a master audit file.
4. The computerized system according to claim 1, further comprising: at least one data storage structure configured for storing a matched file produced by matching the plurality of bank transactions in the issue file, the plurality of transaction confirms and the status reports in the paid file.
5. The computerized system according to claim 1, wherein the at least one processor is further configured to update at least one Sub Ledger based on one or more of the plurality of insurance claim transactions that have been accepted and are contained in a financial-impact file.
6. The computerized system according to claim 1, wherein the at least one processor is further configured to accept or reject one or more of the plurality of insurance claim transactions provided from the third party administrator.
7. The computerized system according to claim 1, wherein the at least one processor is further configured to implement a master file update protocol for generating an audit file based on one or more of the plurality of insurance claim transactions provided from the third party administrator.
8. The computerized system according to claim 1, wherein the at least one processor is further configured to implement a financial sync process for generating a financial-impact file correlating at least one policy account to at least one of the plurality of bank transactions that have been accepted.
9. The computerized system according to claim 1, wherein the at least one processor is further configured to implement a bank lookup process for generating the plurality of transaction confirms based on the plurality of insurance claim transactions that have been accepted and that are contained in a financial-impact file.
10. A non-transitory computer-readable medium encoded with instructions for configuring at least one processor to:
- accept, based on formal rules, at least one insurance claim transaction received from at least one third party administrator;
- receive, from a third party administrator, in the issue file being adapted to be executed by an insurer's bank to make a payment to a claimant from an insurer-owned bank account;
- wherein each of the plurality of bank transactions includes a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- compare the plurality of bank transactions in the issue file to a plurality of transaction confirms corresponding a plurality of insurance claim transactions that have been accepted based on formal rules;
- wherein each of the plurality of transaction confirms includes a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- validate one or more of the plurality of bank transactions in the issue file if the transaction amount, transaction code, and bank information in a corresponding one of the plurality of transaction confirms match;
- pass the issue file received from the third party administrator to the insurer's bank so that the one or more of the plurality of bank transactions that have been validated are executed by the insurer's bank to make the payment to the claimant from the insurer-owned bank account;
- receive from the insurer's bank a paid file comprising a plurality of status reports corresponding to the plurality of bank transactions that have been validated;
- wherein each of the plurality of status reports includes a transaction amount, bank information, and a status code indicating the status of a corresponding one of the plurality of bank transactions;
- compare the plurality of bank transactions in the issue file to the plurality of status reports in the paid file received from the insurer's bank; and
- determine whether one or more of the plurality of bank transactions in the issue file is complete based on the status code in a corresponding one of the plurality of status reports in the paid file and whether the transaction amount and bank information in the corresponding one of the plurality of status reports in the paid file match.
11. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one data storage structure to store information related to at least one policy account, and with instructions for configuring at least one processor to update a Sub Ledger to reflect completion of the at least one validated bank transaction one or more of the plurality of bank transactions that have been validated.
12. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one data storage structure to store an audit file.
13. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one data storage structure to store a matched file produced by the transactions matching engine by matching the plurality of bank transactions in the issue file, the plurality of transaction confirms and the status reports in the paid file.
14. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to update a Sub Ledger according to the at least one paid file provided from the at least one bank received from the insurer's bank.
15. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to accept or reject one or more of the plurality of insurance claim transactions provided from at least one the third party administrator.
16. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to generate an audit file based on accepted insurance claim transactions the plurality of insurance claim transactions that have been accepted.
17. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to generate a financial-impact file correlating at least one policy account to the at least one accepted insurance claim transaction of the plurality of insurance claim transactions that have been accepted.
18. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to update a Sub Ledger based on accepted one or more of the plurality of insurance claim transactions that have been accepted and are contained in a financial-impact file.
19. The non-transitory computer-readable medium according to claim 10, also encoded with instructions for configuring at least one processor to generate claim transactions based on accepted insurance claim transactions the plurality of transaction confirms based on the plurality of insurance claim transactions that have been accepted and that are contained in a financial-impact file.
20. A computer-implemented method for funding third-party-administered claim transactions comprising the steps of:
- receiving, from a third party administrator via a processor, a plurality of claim transactions;
- accepting, based on formal rules via the processor, one or more of the plurality of claim transaction;
- receiving, from the third party administrator via the processor, an issue file comprising a plurality of bank transactions, each of the plurality of bank transactions corresponding to one of the plurality of insurance claim transactions, each of the plurality of bank transactions in the issue file being adapted to be executed by an insurer's bank to make a payment to a claimant from an insurer-owned bank account;
- wherein each of the plurality of bank transactions includes a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- comparing, via the processor, the plurality of bank transactions in the issue file to a plurality of transaction confirms corresponding to some of the plurality of insurance claim transactions that have been accepted based on the formal rules;
- wherein each of the plurality of transaction confirms includes a transaction amount, a transaction code related to an action to be taken with regard to the insurer-owned bank account, and bank information for permitting access and disposition of money held in the insurer-owned bank account for payment to the claimant;
- validating, via the processor, one or more of the plurality of bank transactions in the issue file if the transaction amount, transaction code, and bank information in a corresponding one of the plurality of transaction confirms matches;
- passing, via the processor, issue file received from the third party administrator to the insurer's bank so that the one or more of the plurality of bank transactions that have been validated are executed by the insurer's bank to make the payment to the claimant from the insurer-owned bank account;
- receiving, from the insurer's bank via the processor, a paid file comprising a plurality of status reports corresponding to the plurality of bank transactions that have been validated;
- wherein each of the plurality of status reports includes a transaction amount, bank information, and a status code indicating the status of a corresponding one of the plurality of bank transactions; and
- verifying, via the processor, whether one or more of the plurality of bank transactions in the issue file is complete based on the status code in a corresponding one of the plurality of status reports in the paid file and whether the transaction amount and bank information in the corresponding one of the plurality of status reports in the paid file match.
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Type: Grant
Filed: Dec 16, 2009
Date of Patent: Aug 5, 2014
Patent Publication Number: 20110145019
Assignee: Hartford Fire Insurance Company (Hartford, CT)
Inventors: Jeffrey T. Rehor (Enfield, CT), Kim R. Steinke (Torrington, CT), Kenneth W. Williams (Windsor, CT)
Primary Examiner: Hani M Kazimi
Assistant Examiner: Hatem M Ali
Application Number: 12/639,477
International Classification: G06Q 40/00 (20120101);